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13th Aug 2022

Data flows to US will continue despite EU court ruling

  • Microchips: 'Transatlantic data flows are the backbone of our economy', Jourova said (Photo: Tambako the Jaguar)

The European Commission on Tuesday (6 October) said the transfer of data between the EU and US will continue in light of a European court judgment.

Frans Timmermans, the EU commission vice president, said transatlantic data flows between companies will not stop.

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He told reporters in Strasbourg that “other mechanisms for international transfers of personal data” are available.

Timmermans’ announcement follows a judgment by the European Court of Justice on Tuesday against the so-called Safe Harbour agreement.

The Luxembourg-based judges said US companies under the regime are unable to guarantee an adequate level of protection of data of EU citizens transferred to the US.

Safe Harbour is an executive decision by the European Commission. It means that the Brussels-executive determined in 2000 that the US provides an adequate level of protection of EU citizen data.

But the 15-year old pact has come under intense scrutiny following 2013 media revelations that US intelligence services had direct access to the data of EU citizens from big American companies like Facebook, Apple, and Google.

The judges said indiscriminate and mass collection of people’s personal data violates fundamental rights to privacy and that national data authorities should be empowered to investigate abuse.

Edward Snowden, the exiled US whistleblower behind the surveillance leaks, in a tweet wrote “Europe’s high court just struck down a major law routinely abused for surveillance. We are all safer as a result".

ECJ president retires

Internal issues at the Luxembourg-based court may have also helped speed up the judgment. The Court’s president Vassilios Skouris, who sat in on the landmark case, retires tomorrow.

The panel of judges issued their verdict around two weeks after the Court’s advocate-general published his opinion.

A contact at the Court said the procedure was unusually fast. But he noted that even without the president, “the court would still have been queried”.

Safe Harbour not suspended

The Commission on Tuesday did not suspend Safe Harbour due, in part, to ongoing talks with their US counterparts for a new-model agreement.

“It is important that transatlantic data flows can continue, as they are the backbone of our economy”, said EU commissioner for justice Vera Jourova.

The estimated value of EU citizens' data was €315 billion a year in 2011. The figure is projected to increase to €1 trillion by 2020.

The two sides have been discussing Commission recommendations on how to improve the pact for almost two years. Jourova wanted it finalised before the summer but the US refuses to budge on national security exemptions.

She declined to give any new dates when asked.

Contract clauses and binding corporate rules

Other options remain on how to get data to the US.

It includes standard data protection clauses in contracts between companies exchanging data and binding corporate rules for transfers within a corporate group.

Both already make up the bulk of the transfers to the US, according to German Green MEP Jan Phillip Albrecht.

“The difference is that we are no longer talking about a basic assumption of adequacy, which was adopted by the commission in 2000”, he said.

Albrecht, who recently steered data protection reforms through the parliament, said the US has to protect the data if they want US companies to have equal access to the European digital market.

“That is the whole issue”, he said.

The industry, for its part, is not happy with the Court’s decision.

The American Chamber of Commerce in the EU in a statement said scrapping Safe Harbour could disrupt transatlantic business, hurt the EU economy, and jeopardise a digital single market.

Tech giant IBM also said the ruling jeopardises data flows and creates "significant commercial uncertainty at a time when many European economies remain fragile."

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